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The dollar’s decline is overstated — but still real

The most reliable measure of dollar dominance is probably the loans and other dollar obligations created outside US

Readers would be forgiven for having failed to pounce upon a European Central Bank update this week on the global role of the euro. But the report did say something important about a different currency: the US dollar. The share of reserve assets that the world’s central banks keep in US Treasury bonds is now lower than their holdings of gold.

The demise of the dollar is, of course, wildly over-predicted — more so recently given the impulsive trade tendencies of President Donald Trump. Still, this feels like a milestone. Gold made up 27 per cent of global reserves at the end of 2025, up from 20 per cent a year earlier, the ECB found. The share of Treasuries fell from 25 to 22 per cent over the same period.

This is easily explained by the 64 per cent rise in the price of gold last year. Nevertheless, it matches a pattern. Add all dollar assets together and their share in global reserves was 57 per cent at the end of 2025, according to the IMF, down from 64 per cent a decade earlier.

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